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African Employment Report 1997/98
Page 33 of the Report
ILO: Regional Office for Africa,
1998
1.2.4 Productivity and Real Wage
Labour productivity, measured by output per worker or the ratio of GDP to labour force, declined steadily: between 1980 and 1994. However, the rate of decline clearly accelerated in the 1990s. Table 8 provides data on labour productivity in Africa from 1980 to 1994. Labour productivity recorded a fall of 22% between 1980 and 1994 or at an average annual rate of 1.8%.
Table 8: Labour productivity in Africa, 1980-94
| Year |
GDP (USD) |
Labour (USD) |
Labour Force (m) |
Index of labour Productivity (1980=100) |
| 1980 | 332.908 | 188.75 | 1,764 | 100 |
| 1985 | 363.339 | 213.30 | 1,699 | 96.3 |
| 1990 | 399.810 | 242.22 | 1,651 | 93.6 |
| 1994 | 408.483 | 296.00 | 1,380 | 78.2 |
Source: World Bank1
Between 1980 and 1990 labour-productivity declined by an average annual rate of 0.8% while it plummeted by 3.7% per year between 1990 and 1994.
The disastrous decline in average labour productivity was caused by a lethal combination of poor growth performance, high population and labour force growth rates, and falling investment. The structural adjustment policies of retrenchment and employment embargoes only served to aggravate a bad situation. What happened in the second half of the 1980s and the early 1990s was that the labour force rose more rapidly than output. This led to a fall in the average productivity of labour. Declining average labour productivity combined with rapid inflation inevitably led to falling real wages. According to Griffin2
Rapid growth in the numbers of those seeking employment combined with a slow growth of investment has resulted in a fall in the capital-labour ratio in most (SSA) countries.
Falling capital-labour ratio led to weak GDP growth performance which further served to lower labour productivity and wages. There is a. consensus on. this among researchers and analysts, that faltering wage employment has been accompanied by a sharp falling real wages. This agrees with the finding of the ILO3.
The impact of the economic crisis and consequent slowdown in the growth process has further contributed to a decline in urban wages. Evidence at hand suggests a substantial decline in real wages of the civil service in Africa during the 1980s. Real minimum wages also declined during the 1980s in most African countries.
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